It's raining AGMs as September draws to a close

Over the next 10 days, shareholders would be flooded with hundreds of annual general meetings (AGMs) with thousands of resolutions that determine the form and functions of the companies over the next year coming up for approval.

Between September 21 and September 30, a whopping 697 companies are proposing to hold their AGMs. That would be 45 per cent of all listed companies on the National Stock Exchange (NSE).

Companies get six months from the close of the financial year to get their audited accounts approved by the shareholders. As most companies operate with the financial year ending March 31, September 30 is the big deadline for top management and compliance executives.

According to data from Prime Database, as many as 206 AGMs are scheduled to be held on September 30 alone. One hundred and twenty-six will be held a day before the deadline and 83 on September 28. "This continues to be a disturbing phenomenon as studies have shown that companies which delay their AGMs also perform poorly financially," said Pranav Haldea, managing director, Prime Database.

 

While 77 listed companies had completed their AGMs in the first half of the year, the real AGM season picks up July onwards. As many as 198 shareholder meetings were held in July, followed by 333 in August, peaking in September at 909. Apart from AGMs, shareholders of companies also meet during extraordinary general meetings (EGMs), court-convened meetings (CCMs) in cases of mergers and also have their say through postal ballots.

As many as 11,252 resolutions - translating into an average of 5.46 resolutions per meeting and 7.33 resolutions per company - have been proposed to be passed in AGMs, EGMs, postal ballots and CCMs of 1,534 NSE-listed companies since January 2016, down from 12,432 resolutions in the same period last year.

The number of ordinary resolutions proposed to be passed has been 8,617 (77 per cent) while the number of special resolutions has been 2,635 (23 per cent).

Board changes, appointment of auditors and approval of financial results emerged as the three major types of resolutions. These three together accounted for over half of all resolutions that came up for voting in these meetings.